Do You Have A Close Relationship With Your Credit Card: Gustan Cho

Do You Have A Close Relationship With Your Credit Card?

By Gustan Cho

Have both of you been inseparable through each daily transaction. Are you paying off your monthly balance on time? You probably know all of your card’s important details, like its credit limit, interest rate and your probably have memorized every reward and benefit. You know your card number by heart so all of this detail between you and your card is great but, unfortunately, there’s some bad news that could be financially heartbreaking. Your credit card company may be holding out on you!

Credit Card Companies


The fact is you’ve been kept in the dark about several secrets because your financial benefit comes at your card issuer’s financial loss. Here are a few things that your carrier doesn’t want you to know.

Fixed rates aren’t really fixed. Issuers can raise your APR whenever they choose. This information isn’t necessarily a blatant secret, but it’ll be hidden so deeply in the fine print of your cardholder’s agreement that card companies are hoping you miss it.

One late payment, two penalties. In a perfect world, one late payment equals one penalty fee; on-time payments equal zero fees. In this imperfect world, you can be penalized with two surcharges on one delinquency, and you won’t know about them until you’ve been charged.

Twice the interest in one month? Another one-two financial punch comes in the form of a legal maneuver which allows your card company to impose two months’ interest for just one month of late balance payments.

Disgraceful grace periods. How many of us who’ve made big-ticket purchases have been thankful for the grace period? Say you charge $1,000 to your card and pay $250 by the due date to hold over your creditors. Most cards carry grace periods up to about 25 days, allowing you to pay off the remainder, interest-free. But in the spirit of profiteering, many providers are reducing the grace period to just 20 days, while some are doing away with them altogether.

No card limits just with limits. Many consumers in possession of a no-limit charge card discover they have a revolving spending cap. Let’s use $3,000 – but only learn of it after racking up $5,000 in purchases. This leaves you stuck with a remaining $2,000, plus interest, to pay off. Why is this so? Your card company advertised your plastic as no limits, but it’s really set at a no preset limit.

Minimum payments to the maximum. It’s the nature of the credit beast. The longer you stay in debt, the more interest credit card companies can charge, and the more money they make.

Late payments to any creditor can raise your APR. We hope that our creditors aren’t wishing us to slip up on our repayments, but if there’s one thing to take away from this article, it’s to be on time paying down your debt. A partial payment, be it your credit card, car or mortgage payment, can jack up your total APR across each line of credit in your name.

Jesse is a consultant with Credit Fix Advisors and a financial writer and credit repair expert who has help countless of home buyers and folks in need of credit repair.  Jesse Smith is a credit repair consultant to many real estate agents, mortgage brokers, attorneys, and other professionals who need to help their clients with credit repair services.  Jesse Smith and his staff work daily with consumers, automobile dealers, real estate professionals, mortgage brokers, banks, credit unions, and mortgage bankers in order to repair consumer’s credit reports and maximize their FICO credit scores.  For a free credit repair analysis of your credit report, please contact Jesse Smith at Credit Fix Advisors at 888-900-1020 or email Jesse Smith at or inquire at  

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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